TEES Valley Mayor Ben Houchen has faced criticism over scrutiny of the multi-million pound investment in Teesside Airport after elected members were blocked from scrutinising its finances.

Veteran Middlesbrough councillor John Hobson said he felt councillors were being kept on a “bit of a long lead” by Mr Houchen and his Tees Valley Combined Authority (TVCA).

Cllr Hobson chaired a sub-committee at the authority which was set up to scrutinise and ask questions of TVCA’s 2021/22 budget.

When it came to the airport, sub-committee members were advised by officers that the responsibility of the combined authority did not extend to a detailed budget review of a separate company.

Mr Houchen made taking back control of the loss-making airport a key pledge of his in the 2017 mayoral election. He said scrutiny members had been given the opportunity to probe the airport at “many meetings in recent months” and reiterated that he had “saved it from closure”.

Labour’s candidate for Tees Valley Mayor, Jessie Joe Jacobs called for greater transparency from Mr Houchen and said the public needed to know their money was being spent wisely.

To date TVCA has funded – through loans – the £40.2m cost of buying the airport in 2019 and provided a further £19.4m to support operational expenditure, along with £15m towards capital expenditure.

The LDRS revealed last November that the airport made a £2.6m loss in the previous 12 months, although this was said to be in line with a ten-year turnaround plan.

Cllr Hobson, chairman of Middlesbrough Council, attempted to present the findings of his sub-committee in respect of the 2021/22 budget at a recent TVCA cabinet meeting but was cut short by Mr Houchen and only allowed to read out three observations the sub-committee wished to place on record.

The sub-committee said it was not given the opportunity to look at Teesside International Airport Limited, a subsidiary of the combined authority, and was not able to scrutinise fully spending involving public funds.

Cllr Hobson said he was not satisfied with the response he and other members received.

He said: “The combined authority are giving money to the airport and it should be us who looks after what it is spending on.

“There is not much point having an overview and scrutiny committee if you are not going to take notice of what they find or what they do."

“I had a proper report written out and he [Mr Houchen] didn’t seem to want me to go through the ins and outs of it, which was disappointing as I had put a bit of work into it.

He added: “It seems as if we are kept on a bit of a long lead.”

Cllr Hobson, who was a Conservative previously before joining the Middlesbrough Independent Councillors Association, added: “I have known Ben Houchen for a long time, I used to be a Conservative and we’ve delivered leaflets together, been at functions together and meetings.

“I think he does a good job, but there are things that could be done better.”

The ownership structure surrounding the airport consists not only of an airport limited company, but another subsidiary of TVCA, Goosepool.

In January 2019 TVCA formed Goosepool 2019 Limited to support the purchase of Teesside International Airport Limited – formerly known as Durham Tees Valley Airport Limited – from the then majority owner Peel.

In February of that year Goosepool bought 89 per cent of the share capital of the airport with the remaining 11 per cent continuing to be held by the five local authorities in the Tees Valley region – Darlington, Hartlepool, Middlesbrough, Redcar and Cleveland and Stockton – although the shares have a zero value due to operating losses incurred in recent years.

A month later TVCA’s 100 per cent shareholding in Goosepool was reduced by 75 per cent with a 25 per cent shareholding being taken by private firm Stobart Aviation – meaning the airport is not 100 per cent publicly owned.

TVCA governs financial transactions relating to Teesside International Airport Limited via Goosepool, which is regarded as an intermediary subsidiary.

Goosepool has an executive board consisting of four directors, including TVCA chief executive Julie Gilhespie and Kate Willard, from Stobart Aviation.

They are said to meet on a weekly basis to discuss operations in-depth, including cash flow forecasting, reporting requirements and loan monitoring.

Recently an internal audit by the audit and assurance company RSM UK said TVCA had an adequate and effective governance process in place via Goosepool to manage financial transactions in respect of Teesside International Airport Limited.

However it said during the covid-19 pandemic TVCA had not thoroughly monitored variations in funding from an original business plan set out for the airport and agreed by cabinet members in 2019.

The business plan was subsequently updated and presented to TVCA’s cabinet last November, but the full plan was not made publicly available as it was deemed commercially sensitive.

Financial support has been provided to the airport by TVCA after it was forced to suspend flights because of the pandemic last year, while a £471,000 grant was also awarded by the Government to cover the cost of its business rates.

In December Mr Houchen revealed plans for a staff recruitment drive at the airport and has highlighted ongoing developments.

He said it was an airport on the up and 2021 – the airport’s 80th anniversary year – would be the “biggest and best for a very long time”, predicting boldly that when fully-reopened passengers would be “flooding through” the airport terminal.

Two new executive lounges are being created at the airport, along with a coffee shop.

A duty-free area for shoppers is also set to return after an absence of eight years and a dedicated ‘family friendly’ zone introduced.

Extra check-in desks are being installed with work being undertaken by local firms and expected to be complete in the next few months.

Security has also been boosted with new “cutting-edge” baggage and body scanners being put in place.

Last autumn it was confirmed that low-cost carrier Ryanair was returning to Teesside, offering services to Alicante and Majorca from June, while the UK’s biggest holiday company TUI is also due to start a Majorca service in 2022.

Meanwhile, Loganair will begin operating a series of domestic flights from next year, while a new Eastern Airways service to London Heathrow was previously announced.

Last year TVCA chief executive Ms Gillespie said it was not directly subsidising flights after she was questioned by scutiny committee members who said they did not approve of a blank chequebook being given to the airport and were “insulted” after being told information was private.

Responding to criticism about a lack of transparency surrounding spending on the airport, Mr Houchen said: “The role of the overview and scrutiny committee is to scrutinise the combined authority and as part of their work they have been given the opportunity to scrutinise the airport at many meetings in recent months.

“It’s a shame that those councillors who were around when the councils ran our airport and stood by and did nothing as Peel ran it into the ground weren’t as concerned then.

“Maybe if they had been, I wouldn’t have had to save it from closure.

“If we’d listened to the naysayers we would not be celebrating our airport’s 80th anniversary this year, instead we’d be mourning its closure, staff would have lost their jobs and a vital national and global connection for Teesside would have been lost forever.”

Labour’s candidate for Tees Valley mayor, Jessie Joe Jacobs said: “Over £50m has already been spent on the airport and millions more continue to be poured in while passengers aren’t even flying.

“This is taxpayers’ money, our money, given by the Government to bring jobs, business and prosperity to the whole of the Tees Valley.

“Given the huge amount committed from a limited budget it is important that Teesside Airport succeeds, but I also think people have a right to ask questions about how their money is being spent.

“No one is asking the mayor to spill the beans on commercial secrets – they’re just asking for openness.

“It is time for Mr Houchen to be more transparent, stop hiding behind loopholes and give the public a clear picture of what is happening.

“As much as they want the airport to succeed, they also want to know their money is being spent wisely.”